Tuesday, February 21, 2012

Republicans: Pension shift would be a cut to education

By Ashley Griffin

While Gov. Pat Quinn says he plans to increase education spending under his budget proposal, some Republicans leaders say an idea he has pitched to reform the state employee pension systems would result in a potential $1 billion cut for downstate schools.

Quinn, Speaker of the House, Michael Madigan and Senate President John Cullerton have all publicly tossed around the idea of having school districts outside of Chicago pick up some of the cost of their teachers' pensions.

While Quinn plans to propose about a 1 percent increase in education spending during his budget address Wednesday, Republicans say his pension idea could lead to higher property taxes or possible layoffs. Quinn has said that schools should pay some of the pension obligation but hasn’t released any details about the idea.

“At this point, its an idea. We are not sure what and how they want to do this, but at the end of the day we are talking about shifting a $1 billion to local school districts. … So you are going to lose teachers or have a massive property tax hike,” said Sen. Ed Sullivan, a Republican from Mundelein.

With little details on the portion of costs school districts might have to pick up under such a plan and no tangible legislation in sight, some Republican leaders fear the worst for local districts.

“My school district, Wauconda, which is in the northern part of the legislative district, I am told it would take a hit of about $2.24 million [that] would be shifted onto that school district and that does mean massive layoffs or much higher property taxes,” said Rep. Kent Gaffney, a Republican from Lake Barrington.

During a Tuesday night budget briefing, Quinn’s budget officials did not give specifics on his plans for revamping the pension system; but they did emphasize how much teacher’s pensions make up the overall pension cost to the state.

Jerry Stermer, senior advisor to the governor, said that the Teachers' Retirement System (TRS) accounts for 51 percent for the overall pension cost, or $2.7 billion of the more than $5 billion the state has to pay pensions in Fiscal Year 2013.

“It’s been clearer and clearer to people that some employers are not directly responsible for the cost of paying retiree benefits,” said Jerry Stermer, who also heads a working group that he says is trying to negotiate changes to the system.

Stermer’s says his group is meeting with stakeholders on pension reform, and any ideas would have to go through the legislative process. So don’t expect specifics on pension changes during the governor’s budget speech scheduled for Wednesday at noon.


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